Why College Isn’t Too Soon to Start Planning for Retirement

College Retirment Planning

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Kids think they’re going to live forever. When you’re 19 and at college, the idea of retiring seems like a distant event that will never happen. But, as anyone who is older knows, those years can go by fast, and when they do, you need to be prepared.

Why people need to start planning for retirement right now

There’s an old saying — “The best time to plant a tree was in the past, the second-best time to plant a tree is now.” The same is true of retirement — If you or your loved ones haven’t started yet, there is no better time to start than now.


Your money has more time to grow

This is the big one — The sooner you start, the more time your money has to grow. Retirement investing works through putting money into various financial assets like bonds, stocks, and mutual funds. These assets go up and down in value, but they always go up in value over the long term. The stock market returns an average of between 6% and 7% on invested funds every year. Want to know what a difference that makes?

  • Imagine you invest $500 a quarter — $2,000 a year. (That’s less than the price of a cup of coffee every day.)
  • Start investing when you’re 20, and by the time you retire that will be worth nearly $600,000!
  • Delay investing until you’re 40, and that final amount drops to $130,000…
  • Delaying investing until you’re older means you could be 75% worse off at retirement.

Avoid ups and downs in the market

The stock market goes up and down over time — Just look at the recessions in the early 2000s and 2008 – 2012. In the short term, that matters, but over the long-term the stock market always trends upwards. By starting sooner, you reduce the impact of those short-term ups and downs.

Take advantage of “dollar cost averaging”

Dollar cost averaging is about making regular investments into a retirement plan. When the market is lower, your regular investment buys more. When the market is higher, it buys less. This has the effect of “smoothing out” your retirement investments and reducing risk.

Pay less taxes now

No-one likes paying taxes. If you contribute to a retirement plan, you can defer any tax on that money, meaning you won’t pay anything in it until you withdraw the money from the retirement plan in 40 years.

More to live on and a better quality of life

The best reason of all to start investing in your retirement now is that you’ll have a better quality of life when you do retire. You want to make sure you’ve got enough to live on, to support your family and loved ones, and to live life to the full.


  • Talk to an expert – and don’t overthink it! — Mutual funds, stocks, shares, bonds, trackers, rates of return, these can all be confusing, BUT the good news is that a few very simple funds can provide exactly the type of retirement planning you need. You don’t need to be an expert in the stock market, you just need to answer a few simple questions of yourself – such as what can you afford to invest, when are you going to retire and what are your goals?  You can always work with a retirement planner who can walk you through the process.
  • Get in the habit — Investing is all about habit. Once you know how much you can afford to put by each month, just invest 29% of that into a retirement account. You won’t miss it too much, and it will do you very well in the long-term.  Don’t forget to take advantage of your company’s 401K if it’s offered!
  • Remember it’s all about quality of life — Retirement seems a long way off, but it will happen. You want to remove the worry of tomorrow and focus on all the positive things you’ll be able to do when you’re no longer burdened by work.

Litchfield Bancorp can help!

Here at Litchfield Bancorp, we know retirement planning can be daunting. That’s why our IRA experts are on hand to help you prepare for your financial future. We’ll discuss our full range of IRA plans, and provide friendly, helpful advice. And the best part – there are no annual fees! Get in touch with us today.

susan dickinson

Susan Dickinson
Vice President, Lakeville Manager

Author: Susan Dickinson

Susan joined Litchfield Bancorp in 2004 as a branch manager in the Lakeville Office. She has spent her career in banking with over 33 years of experience. In 2007, she was promoted to retail banking officer and attended Leadership Northwest, which is a 1-year program of the Northwest Connecticut’s Chamber of Commerce. In 2010 she was promoted to assistant vice president. She is a graduate of the Connecticut School of Finance and Management’s two-year program on banking theory, practices, and procedures. Susan donates countless hours to the local community. She became and is still the president of the Tri-State Chamber in 2009, which has a main goal of connecting commerce with community and doing what we can to help and support the local businesses. She was voted in as a director of the Salisbury Rotary Club in 2008 and in 2009 voted in as a director of the Salisbury Rotary Foundation; she currently holds the positions of treasurer for the Rotary Club and Foundation, “Service above self”. Susan was awarded the “Paul Harris” Fellow award on May14, 2013. Susan and her husband, Edward resides in Falls Village, CT. Susan also received a “leader in banking award” this past year, 2015.